BMO 2016 Timber & Wood Products Summit INVESTOR PRESENTATION - PowerPoint PPT Presentation

BMO 2016 Timber & Wood Products Summit INVESTOR PRESENTATION May 10, 2016 | Seattle, Washington

Forward-Looking Statements This presentation and comments associated with it contain forward-looking statements including statements relating to U.S. housing recovery, the potential for constrained lumber supply, energy-related opportunities, earnings sensitivity and estimated annual capital expenditures. These statements are subject to the cautionary statement which introduces West Fraser’s 2015 Annual Management’s Discussion & Analysis which can be accessed on the Company website www.westfraser.com. 2

WEST FRA WEST FRASER SER OU OUR GO GOALS LS a re to develop and maintain… Excellence in Performance and People Leadership in our Field THEN THEN Challenge and Satisfaction Responsibility in the Communities in Which we Work Profitability Growth NOW NO 3

Our Strategy • Operational excellence • Diversification • Product differentiation • Integration 4

Operational Excellence • Managing to ensure a committed workforce • Cost control and efficiency • Continuous reinvestment • Internal and external benchmarking and competition • Straightforward, consistent business model 5

Product Diversification LUMBER PANELS PULP & PAPER 28 mills 7 mills 5 mills SPF 4.0 Bfbm Plywood: 830 MMsf3/8” NBSK: 570 Mtonnes SYP 2.3 Bfbm MDF: 250 MMsf3/4” BCTMP: 650 Mtonnes Total 6.3 Bfbm LVL: 3.2 MMcf Newsprint: 135 Mtonnes • North America’s largest lumber producer • Largest plywood producer in Canada • Third largest pulp producer in Canada 6

Trend Sales Mix ($) Pulp & Paper 23% Lumber Panels 66% 11% 7

Operations diversified by geography Geographic diversification Lumber Capacity U.S. B.C. 39% 37% Alberta 24% 8

Product Differentiation • Wood as the best environmental choice • Renewable resource, sustainable business • Expanding applications • Bioenergy, full use of the resource 9

Integration (in Canada) • Lumber, panels, pulp, newsprint and energy • Substantial fibre self-sufficiency • Fuller utilization of resource • Some benefits from counter-cyclicality • Better able to respond to new opportunities such as bioenergy 10

Earnings Growth Drivers - Lumber Demand - North American housing - Residential improvements - Chinese construction and industrial applications - Japanese housing Supply - Fibre limitations - Residual offtake - Mill closures - People Efficiency - Capital investment - Business model 11

-10% 10% 15% 20% 25% 30% 35% 40% -5% 0% 5% Returns on Lumber 1991 1992 1993 1994 1995 1996 1997 1998 1999 EBITDA Margin (%) - Lumber 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Average: 15% 2010 2011 2012 2013 2014 2015 12

U.S. Housing Pent Up Housing Demand (conventional + mobile) 2.25 2.00 1.75 Million Units 1.50 1.25 1.00 0.75 Production Underlying Demand 0.50 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Significant pent up demand bodes well for long-term recovery 13 Source: FEA, 03-16

US Housing Single Family Share well below 30 year average Share of single-family housing starts 90% 85% 80% 75% 70% 65% 60% 30 year average share = 76% 55% 50% 70 75 80 85 90 95 0 5 10 15 14 Source: FEA

Unlike Single-Family, Multi-family has Recovered Thousands 2,000 600 1,800 500 1,600 1,400 400 1,200 1,000 300 800 200 600 400 100 200 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Single-Family (Left Scale) Multi-Family (Right Scale) 15 Source: U.S. Census Bureau

U.S. Lumber End Use U.S. Lumber End-use 2015 U.S. Lumber End-use Normalized Nonresidential/ Nonresidential/ Mobile, 7% Mobile, 5% Single Family Construction, 26% Industrial Single Family Production, 23% Construction, Industrial 37% Production, 28% Multifamily Construction, 4% Multifamily Residential Residential Construction, 4% Improvements, Improvements, 29% 37% 16 Source: FEA and WF

Canadian SPF Shipments to China 3,500 2015 - Equivalent to 205,000 housing starts * 3,000 2,500 2,000 MMfbm 1,500 1,000 500 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 * Based on consumption of 11.5 Mfbm per U.S. housing start (average mix of single and multi family) 17 Source: Council of Forest Industries

China Imports of Logs and Lumber 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Lumber Logs 18 Source: General Administration of Customs of The People’s Republic of China

B.C. Shipments to Japan Mmfbm Thousand 2x4 Starts 1,600 140 Shipments 2x4 Starts 1,400 120 1,200 100 1,000 80 800 60 600 40 400 20 200 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 19 Source: Council of Forest Industries

NO NORTH AMERIC TH AMERICAN AN LUM UMBER BER PR PROD ODUC UCTION TION Billion Feet 23 23 80 80 75 72 21 21 70 70 65 59 19 19 60 60 56 54 53 51 49 17 17 50 50 47 42 15 15 40 40 13 13 30 30 11 11 20 20 9 10 10 7 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total North America (R Axis) BC Interior Rest Of Canada US South Rest of US 20 Source: US Census Bureau & Statistics Canada

North American Lumber Capacity 21

Earnings Growth Drivers - Pulp Demand - China’s paper, tissue and packaging demand - Developing countries’ demand Supply - European paper capacity closures - European pulp capacity increases - China pulp mill closures - South American capacity increases Reliability - Capital - Technology 22

Chemical Pulp End-Use Products Other Boxboard 4% 5% Fluff Based Products Printing and 10% Writing Papers 31% Specialty Papers 19% Source: PPPC 2013 Tissue 31% 23

BCTMP Pulp End-Use Products Other Newsprint 3% 4% Specialty Papers 8% Boxboard 44% Printing & Writing 41% Source: PPPC 2013 24

Paper — Newsprint North American Newsprint Cost Structure Par Exchange Rate Cdn$/tonne ANC Alberta Newsprint is the lowest cost newsprint producer in North America and a positive contributor to the profitability of our pulp and paper business 25 Source: PPPC Cost Survey 2012

Energy Opportunities • Woodwaste to produce heat and steam to dry wood products and for electricity and steam for pulp mills • Woodwaste to produce electricity to be used or sold • Pulp mill effluent as a source for biogas-electricity generation • Expanding opportunities to generate and sell electricity levering off current business 26

Capital Strategy • Reinvest profits to lower costs, improve efficiency through technology and improved processes • Capital spending in 2015 of $220 million • Capital spending 2012 – 2015 in excess of $1 billion • Estimated 2016 spending of $300 million and normalized spending between $175 and $225 million • Growth through opportunistic acquisitions focused on solid wood 27

West Fraser Capital Capital Spending $ Million 450 410 400 358 350 300 250 220 200 150 100 50 0 2013 2014 2015 Maintenance Timber Profit Improvement Energy 28

Why Invest in West Fraser? • Proven ability to generate strong cash flow even in worst markets • Consistent, straightforward business plan • Loyal, long-term employee and management base • Conservative financial management coupled with proven ability to grow strategically • Strong historical shareholder returns 29

Strong Cash Generation ($millions) Total 2015 2014 2013 2010-2012 Cash from Operations 1,896 301 475 419 701 Capital Expenditures 1,449 220 410 358 461 Acquisitions 314 76 208 - 30 Debt/Capitalization 22% 30

Share Value Traded Cdn$ Million 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2015 2014 2013 WFT CFP IFP 31

Annualized Shareholder Return (Cdn$) June 2006* – December 31, 2015 14% 12.6% 12% 10% 7.6% 8% 7.4% 7.1% 5.3% 6% 3.9% 4% 2% 0% West Fraser Dow S&P/TSX Competitor A Competitor B Competitor C * June 2006 marked the beginning of the steep decline in U.S. housing starts 32 Source: TD Bank

“WFT” – Toronto Stock Exchange www.WestFraser.com These materials have been prepared by Management of the Company. No regulatory authority has approved or disapproved of the contents of these materials. These materials do not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company, and shall not constitute an offer, solicitation or sale of the Company’s securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. Securities of the Company may not be offered or sold in the United States absent their prior registration or qualification or an applicable exemption from the applicable registration or qualification requirements. 33

APPENDIX 34